Global Intellectual Property
European Parliament adopts position on the European Commission's proposed changes to the Trade Marks Directive and Community Trade Mark Regulation
The European Parliament has adopted its position at first reading on the European Commission's proposals to reform both the Trade Marks Directive (Directive 2008/95/EC) and Community Trade Mark Regulation (Regulation 207/2009), which were published in March 2013.
The proposals for reform seek to increase consistency between national trade mark law and the Community Trade Mark (to be renamed the "European Union Trade Mark" under the Parliament's proposed amendments), whilst ensuring that national trade mark protection remains an attractive option for applicants.
We review below Parliament's amendments to the most significant proposals concerning the protection and enforcement of trade marks.
The origin function and scope of infringement in double identity cases
The Commission had proposed to limit the scope of infringement in double identity cases (identical trade mark and identical goods/services) only to instances where the use of the sign "affects or is liable to affect the origin function". The premise for this was that the recognition by the courts of additional trade mark functions, such as advertising and investment, had created legal uncertainty between double identity cases and the extended protection afforded to marks with a reputation.
However, Parliament has proposed removing this limitation, earlier stating in its draft report that this requirement would create increased legal uncertainty. This is a welcome development for brand owners who saw the Commission's proposal as a retrograde step from recent case law, notably Bellure, recognising additional trade mark functions over and above the origin function.
Counterfeit goods in transit
The Commission has proposed to reverse the position of the CJEU in Nokia/Phillips to allow brand owners to prevent third parties from bringing counterfeit goods into the customs territory of the EU regardless of whether the goods are released for free circulation. Therefore, counterfeit goods in the physical territory of the EU under a suspensive customs procedure such as
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external transit would be treated as having entered the EU jurisdiction for
trade mark infringement purposes.
The fundamental principle that trade mark proprietors should be able to
enforce their rights against counterfeit goods in transit through the EU has
been retained, but the provisions have been subject to certain amendments
during Parliament's reading. In its earlier draft report, Parliament proposed
adding a requirement that the trade mark owner must have a valid trade mark
registration in the final destination country of the goods concerned, such that
they would also be counterfeit in that destination. This requirement has not
been retained in the final report.
Parliament's proposed amendments now expressly state that the entitlement
of a trade mark proprietor to prevent third parties from bringing, in the context
of commercial activity, counterfeit goods into the customs territory of the
Union without being released for free circulation there is without prejudice to
WTO rules, in particular Article V GATT, which concerns freedom of transit.
Furthermore, new recitals proposed by the Parliament expressly set out that in
the case of suspected counterfeit goods in transit, trade mark proprietors
should have the right to request national customs authorities to take action to
seize and destroy such goods under the terms of the Customs Regulation,
subject to the provision within that Regulation that a rightsholder is liable in
damages to the holder of such goods if they are subsequently found not to be
The Parliament has also sought to deal with the issue of legitimate trade in
generic medicines. Additional new recitals proposed by the Parliament provide
that the right of a trade mark proprietor to take action in respect of goods in
transit should be "without prejudice to the smooth transit of generic medicines
in compliance with the international obligations of the European Union, in
particular as reflected in the [Doha Agreement]". In terms of more detailed
provisions, a further proposed new recital provides that "A proprietor of a
European Union Trade Mark should not have the right to prevent the transit of
goods based upon similarities, perceived or actual, between the international
non-proprietary name (INN) for the active ingredient in the medicines and a
registered trade mark".
The overall proposed change to the law regarding goods in transit remains a
positive development for brand owners which will enhance their ability to
tackle infringement globally.
The Commission's proposals include a new provision enabling brand owners
to object to the importation into the EU of infringing goods, even if only the
consignor is acting "for commercial purposes". This is intended to target the
online sale of counterfeit goods to private consumers.
Whilst the Commission's proposals referred to infringing goods, this has now
been amended by Parliament to apply to counterfeit goods in small
consignments, as defined in the Customs Regulation (608/2013, which came
into force on 1 January 2014). Furthermore, the Parliament proposes
amending the requirement of acting "for commercial purposes" to acting "in
the course of trade". In addition, where measures are taken against such
consignments, the individual or entity that ordered the goods is to be informed
of the reason for the measures and their legal rights vis-à-vis the consignor.
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Limitations of the effects of a trade mark
In relation to the permitted use of a trade mark for the purpose of identifying or referring to goods and services as those of the trade mark proprietor, Parliament has proposed expressly setting out the following non-exhaustive list of uses which in particular fall within that section, namely where the use of the mark:
is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts;
is made in comparative advertising satisfying all conditions set forth in the Misleading and Comparative Advertising Directive (Directive 2006/114/EC);
is made to bring to the attention of consumers the resale of genuine goods that have originally been sold by or with the consent of the trade mark proprietor;
is made to put forward a legitimate alternative to the goods and services of the trade mark proprietor;
is made for the purposes of parody, artistic expression, criticism or comment.
These uses are only permissible to the extent that the use made is in accordance with honest practices in industrial and commercial matters.
Furthermore, Parliament has proposed adding a further provision that a trade mark "shall not entitle the proprietor to prohibit a third party from using the trade mark for a due cause for any non-commercial use of a mark".
Absolute grounds objections existing in other member states
The Commission had proposed extending the application of the absolute grounds for refusal so that a trade mark application in one member state could be refused on the basis of absolute grounds objections to that mark existing in another, and also where an absolute grounds objection would apply to a mark written in a foreign language mark if it were translated into any of the EU official languages.
Parliament has proposed removing this amendment, the draft report indicating that it would conflict with the territorial nature of national trade mark registrations and would be "disproportionate and practically unworkable to require national offices to examine absolute grounds for refusal in all national jurisdictions and languages of the Union."
Further to the Commission's proposal to remove the requirement of graphical representation, Parliament has proposed that the sign be capable of being represented in the register in a manner which enables the competent authorities and the public to determine the "precise" (or, in relation to the CTM Regulation "clear and precise", although this anomaly may be addressed in the final versions) subject of the protection afforded to its proprietor and that the form of representation "uses generally available technology". Proposed amendments to the recitals further set out that the representation "must be capable of being represented in the register in a manner which is " clear, precise, self-contained, easily accessible, durable and objective", thus
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importing into both the Regulation and Directive the criteria set out by the CJEU in the Sieckmann case
Specifications and the effect of IP Translator
Under the draft new CTM Regulation, proprietors of trade marks applied for prior to 2 June 2012 which claim Nice class headings may file a declaration that their intention on the date of filing had been to seek protection in respect of goods and services beyond those covered by the literal meaning of that class heading.
Parliament has proposed increasing the period within which trade mark proprietors may file a declaration, from 4 months to 6 months after the revised CTM Regulation comes into force.
Parliament has also added a number of transitional provisions, under which trade mark proprietors who revise the goods and services covered by their marks will not be entitled to (1) prevent the continued use of a mark where use commenced before the register was amended and did not infringe the proprietor's rights based on the literal meaning of the goods and services at the time, or (2) oppose or seek to invalidate a subsequent mark which was applied for before the register was amended and where the use of the later mark did not or would not have infringed the proprietor's rights based on the literal meaning of the goods and services at the time of filing.
Parliament has retained the following amendments it proposed to the requirements around assignments of trade mark rights and their recordal.
1. Removal of the requirement for assignments to be in writing and signed. Although in practice most assignments will still be in this form, Parliament considered that formally requiring this could fetter parties' freedom, especially in e-commerce.
2. When requesting a recordal of an assignment in the register, the requesting party must provide documentary evidence of the assignment.
3. An assignee is to be able to invoke its rights once the application for the assignment to be registered has been received by the relevant office, and not once it has been entered onto the register, as is currently the case.
Parliament has also made a number of further proposed amendments, the most significant of which are summarised below:
Terminology: All references to Community are to be changed to "European Union" so Community Trade Mark becomes "European Union Trade Mark". OHIM is to be known as the "European Union Intellectual Property Agency" (and not the "European Union Trade Marks and Designs Agency" as originally proposed by the Commission).
Plant Variety Rights: Community Plant Variety Rights to be added as an absolute ground for refusal, in the interests of consistency with the
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proposed amendments to the Community Trade Mark Regulation (Regulation 207/2009 EC).
Consent to registration: It is to be obligatory for national offices to give effect to consents and allow the registration or maintain the validity of later marks where the holder of an earlier mark has consented.
Address for service: Parliament proposes relaxing the requirements to allow parties to designate an address for service within any member state, not necessarily the country in which proceedings are taking place.
Scope of oppositions, invalidity actions and revocation actions: Under Parliament's amendments, a trade mark owner would be permitted to file a single opposition or invalidity action based on multiple prior marks, with no need to file separate actions for each mark relied on. Actions can also be based on some or all of the classes in which a prior mark is registered, and directed against some or all of the classes covered by the contested mark. This will allow oppositions and invalidity actions to be prosecuted more efficiently in Member States which do not currently permit this.
Parliament's proposed amendments are now to be sent back to the Commission for further review, and it remains to be seen the extent to which these proposals are adopted in the final versions of the Directive and Regulation.
For our previous alert on the Commission's original proposals, please click here.
The full text of the Parliament's reports can be found here for the CTM Regulation, and here for the Trade Marks Directive.